Digi’s Recurring Revenue Push and Jolt Acquisition Could Be a Game Changer for DGII

• Digi International Inc. recently reported fourth quarter 2025 earnings, highlighting sales of US$114.34 million and net income of US$9.98 million, alongside guidance projecting 10-15% revenue growth for fiscal 2026.
• An important insight is the company's growing focus on recurring revenue and its acquisition of Jolt Software, both of which are central to Digi's evolving IoT and subscription-based business model.
• We’ll explore how Digi’s rising annual recurring revenue and the integration of Jolt Software inform its investment narrative moving forward.

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Digi International Investment Narrative Recap

To be a Digi International shareholder, you need to believe in the company’s shift toward recurring revenue and its ability to drive double-digit ARR growth as core drivers of stable, long-term earnings. The latest results reinforced this focus, with Q4 sales improvement but lower earnings year-over-year, suggesting that sustaining margin expansion through the recurring revenue model remains the most important catalyst, and execution risk around this transition remains the principal concern near-term.

Among Digi’s recent announcements, the acquisition of Jolt Software stands out, directly supporting the transition to a subscription and IoT-driven business model. This move expands Digi’s reach in software-centric offerings and aligns with its strategy to grow ARR, underpinning the company’s revenue guidance for 2026 and contributing to the short-term growth catalyst facing the business.

By contrast, potential headwinds remain if the recurring revenue transition slows, a consideration investors should be aware of if they are...

Read the full narrative on Digi International (it's free!)

Digi International's outlook anticipates $497.0 million in revenue and $72.6 million in earnings by 2028. This is based on a forecasted 5.7% annual revenue growth and a $29.9 million earnings increase from current earnings of $42.7 million.

Uncover how Digi International's forecasts yield a $45.80 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Three members of the Simply Wall St Community set Digi International’s fair value estimates as low as US$37.38 and as high as US$71.15 per share. As you weigh these opinions, keep in mind that future ARR expansion is a key catalyst many see affecting Digi’s performance.

Explore 3 other fair value estimates on Digi International - why the stock might be worth as much as 78% more than the current price!

Build Your Own Digi International Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Digi International research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Digi International research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Digi International's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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